Japan’s SoftBank Group posted a fourth straight profitable quarter, buoyed by its investment in OpenAI and deepening involvement in AI. Net profit in October-December was 248.6 billion yen, a turnaround from a loss the previous year. Analysts projected gains between 1.1 trillion yen and a loss of 480 billion yen.

SoftBank has invested over $30 billion in OpenAI, holding an 11% stake. The conglomerate seeks to dominate the market for large language models. OpenAI is seeking a $100 billion capital injection, with SoftBank, Amazon, and Nvidia interested in investing at a valuation of $830 billion.

SoftBank recorded a $19.8 billion gain on its OpenAI investment. To fund its investments, SoftBank is relying on asset sales, bond issuance, and loans backed by its holdings. The heavy reliance on OpenAI has made SoftBank a proxy for the firm, raising concerns about its financial stability.

SoftBank has increased its borrowing against shares in Arm and its domestic telecoms unit, SoftBank Corp. The conglomerate has sold off its stake in Nvidia and part of its T-Mobile position. OpenAI faces rising costs amid competition from Alphabet, as it prepares for a potential IPO.

SoftBank’s loan-to-value ratio rose to 20.6% by December, with a cash pile of 3.8 trillion yen. SoftBank’s shares rose 2.4% ahead of the earnings release. The conglomerate’s strategy of investing in OpenAI is drawing attention and scrutiny from investors.

Read more at Yahoo Finance: SoftBank posts fourth straight quarterly profit on OpenAI investment gain